Southern Copper Corporation (SCC) (NTSE: SCCO), a subsidiary of Grupo Mexico (BMV: GMEXICOB), and operator of Minera Mexico and Southern Peru Copper, has among its approved plans to start up the Tia Maria copper project (Arequipa) for Q2’20, with a production of 120,000 t/year and an investment of US$1,480 million, according to Raul Jacobs, the company’s Financial Manager, during his presentation in the 16th World Copper Conference of CRU.
The event organized yearly by CRU, the metals and fertilizers consultant worldwide, brought together over 400 leaders of the copper industry and its value chain, in Santiago (Chile), and for two days they listen and debated about the industry’s current and future situation.
The production that Tia Maria will contribute with, will allow Grupo Mexico to achieve its goal to reach a total copper production of 1.2 Mt for 2021, alongside the other projects such as the Toquepala expansion (100,000 TMF/year) in the south of Peru and El Pilar and Pilares projects (Mexico).
Other projects in portfolio are 1) Los Chancas (concentration and SX/EW) which will produce 134,000 tons of copper and 7,600 tons of molybdenum with a projected investment of US$2,800 million; 2) Cuajone’s Expansion in 50,000 tons of copper and 700,000 tons molybdenum with an estimated investment of US$500 million and 3) the expansion of Ilo Smelter and Refinery (no numbers disclosed yet).
In 2016, the company had a copper production record of 900,000 tons, a 21% increase. This is mainly due to the expansion of its Mexican mine Buenavista, which produced 447,000 tons of copper, a 150% increase as compared to the 150,000 tons produced in 2012.
Jacobs presented the achievements of SCC, the copper company with the largest reserves (71.4 Mt and 63 years of production) and lowest costs in the world’s copper industry (US$0.95/lb, cash cost), which projections for 2017 is to lower it to US$0.85/lb. He said that CODELCO and Freeport follow in terms of quantity of copper reserves worldwide.
“This year, with US$2.5/lb in copper price, we expect to produce 900,000 tons; sales of around US$6 billion and US$2.5 billion of EBITDA equivalent of around 47% EBITDA / Sales. Last year, it was 42% and this will improve as the year goes on”, said adding that alongside Antofagasta Minerals and Rio Tinto, they are the companies with the lowest debt in relation to their EBITDA, while the companies with the most debt are First Quantum, Anglo American and Freeport.
MINISTER TAMAYO REPRESENTED PERU IN THE WORLD COPPER CONFERENCE
Copper production in Peru will reach 3Mt in 2021 (Year of the Bicentennial of National Independence) announced Minister of Energy and Mines, Gonzalo Tamayo, during his speech at the 16th World Copper Conference of CRU.
Said additional production of approximately 700,000 tons as compared to 2016 figures -year of the historic record of 2.3Mt – will mainly come from mid-tier projects near the coast and with fewer social problems, said the Minister.
This is the first time that a Peruvian Minister participates in the World Copper Conference, and he did so in the opening session of the 2nd day in the leading event of the red metal’s mining industry, beginning by thanking the Chilean Government for their support to Peru’s emergency due to the anomalous rainfalls and floods. After the presentation, he continued with an agenda of private and official meetings.
The high official exposed the goals outlined in his management, which are the promotion of exploration making the process more expeditious; maintain the continuity of the projects underway and guarantee the continuity of current operations.
He explained that the way to achieve these goals is through the review of the entire regulatory framework and the implementation of a social in-advance fund, which will enable the generation of synergies with the communities around the mining projects and the State, in order to satisfy their basic needs. “Mining investment will not replace the State”, he said.
Regarding the environment, he told that there are two areas of work: the modernization of existing regulations and the decentralization of the environmental function. In the first case, he announced that the Environmental Quality Standards (ECA) for air will be ready in late April. The ECA for water have been in force since 2015.
In the second area, the National Service of Environmental Certification for Sustainable Investment (SENACE), entity responsible of the verification of environmental standards and the EIAs of all projects of public or private investment, is progressing with a “One-stop shop” and digital mechanisms, but “not as fast as wanted though”.
“Where we do see limitations is in the audit area, where it is focusing too much on small things and it does not approve issues where improvements can be made. For example, a mining company improves more than what is stated in the EIA, but it is identified as a fault even if positive for the environment”, he concluded.